#H&M and a an interesting retail trend #ARGOS

I need to get more efficient at posting these when i actually write them. A bit late but never mind

Some of you may have missed the recent H&M results announcement but contained within evidence of an interesting trend in retail and one which provides guidance in how to compete with the Amazons of this world.

The Hankins Hot Take – Whilst the headlines focussed on the change in leadership, with a new chairman and CEO at the helm, the real news was hidden.  H&M have never been the most e-commerce led business on the high street.  A visit to any store will attest to that whilst their growth has been driven by a vast store opening plan in contrast to the actions of its competitors.  The outgoing Chairmans comment sets out the changes in the following comment “ can we use those stores even better as logistical hubs for deliveries, for pick-ups, for returns?”.  This essentially is the ARGOS “hub and spoke” system that uses the physical stores as part of its supply chain as well as its retail footprint. The Local Data Company already tells us that multi-usage property is on the rise and this change would enhance these figures.  It’s likely that whilst some stores would maintain their size, the proportion given over to in-store fulfilment would decrease with an increasing amount given over to the warehouse/fulfilment area.  The challenge will be whether this can work in the fast moving fashion world,  combined with a reduction in lease costs the multi-usage should actually make it easier to drive profitability IF stock control is effective.  As mentioned though, H&M stores aren’t really known for their order (although the COS’ and &Other stories are more controlled, if smaller) so a complete operational overhaul would also be required including more optimal OMNIchannel merchandising.  NEXT are rolling out this dynamic merchandising programme at the moment which is allowing them to sell more at full price (online) but this is tempered to a degree by the increased costs of online fulfilment although probably not quite as much as some of the NEXT sale deep cuts so “Net Net” its more profitable.


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